You’re new on the job, and you just got your first paycheck. But something seems to be wrong; you should have gotten your money by now. Could your bank be holding your direct deposit—and if so, how long will you have to wait?
How Long Can a Bank Hold a Direct Deposit? As per the “Three Days Good Funds Model,” a bank can only hold your direct deposits for 3 business days. There are federal regulations on how long a bank can hold your deposit. Some exceptions may occur for invalid checks, deposits into new accounts, or deposits over $5,000.
Why Would a Bank Hold a Direct Deposit?
The main reason your bank will hold a direct deposit is that they suspect your funds for one reason or another. This is why many banks will not deposit large amounts of money immediately. It will take additional time to see if your deposit is fraudulent or not.
Another reason your deposit might be slow is the timing. Most banks deposit materials such as paychecks early in the morning. The exact time depends on the bank. For example, if your paycheck is deposited on Friday afternoon, you might not get it until Monday morning.
What Are Some Exceptions?
But there are some common reasons a bank might suspend your direct deposit. These are usually differences in processing time or holidays. Sometimes, there are technical difficulties like the check not going through properly, or an overloaded system.
Here are some exceptions that might make banks hold your direct deposit for more than three days:
- You have a new account.
- The check was, for whatever reason, unredeemable.
- The deposit involved a large amount of money.
- Many banks only process on business days.
- Many banks process every direct deposit at one time of day.
- If your direct deposit was delivered in a batch, it may process more slowly.
- Missing details—the check must match your name exactly as it is on your account!
- Technical difficulties.
- Banks can make money by floating/stalling your funds.
Most banks follow the “Three Days Good Funds Model.” That means they give questionable funds three days before depositing them. Your funds are more likely to be investigated if the deposit is unusual for your account, e.g., a large amount of cash from an unknown source.
The type of direct deposit also matters. For example, federal funds will almost always take longer than any other kind of funding. This is not your bank’s fault; the IRS’s computers are so outdated that its technology cannot easily process millions of forms and requests.
Finally, yes, floating or stalling your direct deposit can sometimes generate extra funds for banks. This has to do with collecting interest. If you notice a pattern, your bank might try to make some money off of your cash!
I Didn’t Get My Direct Deposit. Is My Bank Responsible?
If you didn’t get your direct deposit when you were supposed to, do some research before panicking. Direct deposits from the IRS will take longer than deposits from your workplace. Differences in deposit times are more likely than your bank holding your funds for too long.
If you think your bank is unfairly holding your direct deposit, call your bank’s customer service. That is the only way to learn why your direct deposit is on hold, and allow you to fix it. If your deposit cannot be processed, it will probably be refunded to whoever gave you the deposit.
What Can I Do If There Is a Hold on My Direct Deposit?
The best thing to do is contact your bank’s customer service department. From there, they will tell you why your direct deposit is on hold. You may be able to move it along if you can explain where the funds came from.
Remember, most direct deposit holds are made because the bank is suspicious of the fund. The sooner you can clear things up, the sooner you can get your money. Things will also go slower if you are new to their system.
What Time Does My Bank Process My Direct Deposit?
The time your bank takes to process your direct deposit, along with many other limits on direct deposits, vary with the individual bank. Some banks outsource their direct deposit services to other banks, which makes them take longer.
|Time of Processing
|Bank of America
|By 6:30 a.m. EST
|Fifth Third Bank
|Up to one day early.
|6:30 a.m. EST on payday
Please check your bank’s direct deposit policy—especially if you are about to receive a large amount of cash! And do not worry about your direct deposit if a weekend or holiday got mixed into your wait; most banks only process on business days.
Normally, your direct deposit is usable shortly after it enters your bank account. If your paycheck happens to fall on a holiday or weekend, you may need to wait. Other than that, you can usually expect access to your funds within 2–5 days, with 3 days being the usual time allowed to determine whether a fund is fraudulent or not.
But there are some exceptions to that. Direct deposits made in large batches may take longer than average; federal funds almost always take longer than average due to the federal tax system being outdated. If your deposit is delayed due to missing/mismatched information, you may have to call the bank to resolve the discrepancy.